<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 14A Information
PROXY STATEMENT
Pursuant to Section 14(A) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant: Acme Metals Incorporated
------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Acme Metals Incorporated
- -------------------------------------------------------------------------------
(Name of registrant as specified in its charter)
Acme Metals Incorporated
- -------------------------------------------------------------------------------
(Name of person(s) filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 9-11(c)(1)(ii),141-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules (14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
-----
- --------------------------------------------------------------------------------
2. Aggregate number of securities to which transaction applies:
--------
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- --------------------------------------------------------------------------------
4. Proposed maximum aggregate value of transaction:
--------------------
Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1. Amount previously paid:
--------------------------------------------
2. Form, schedule or registration statement no.:
----------------------
3. Filing party:
-------------------------------------------------------
4. Date filed:
-------------------------------------------------------
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF ACME METALS INCORPORATED:
Notice is hereby given that the 1995 Annual Meeting of Shareholders of
Acme Metals Incorporated, a Delaware corporation, (the "Company") will be held
at Harris Trust and Savings Bank, 111 West Monroe, Chicago, Illinois 60690, on
Thursday, April 27, 1995, at 10:00 a.m., central time, for the purpose of
considering and voting on:
1. the election of six directors, two to serve for a one-year term and
four to serve for a three-year term;
2. the ratification of the appointment of Price Waterhouse LLP as
independent accountants for the Company for the fiscal year 1995;
3. the transaction of such other business as may properly come before
the meeting.
The Board of Directors has determined that only shareholders of record at
the close of business on Monday, March 6, 1995, are entitled to notice of and to
vote at the Annual Meeting of Shareholders or any adjournment thereof.
Whether or not you plan to attend the meeting, please complete the proxy
card enclosed and return it promptly in the accompanying postage prepaid
envelope. If you do attend the meeting and wish to vote in person, you may
withdraw your proxy at that time.
/s/ Edward P. Weber, Jr.
Edward P. Weber, Jr.
Secretary
Riverdale, Illinois
March 31, 1995
IMPORTANT - YOUR PROXY IS ENCLOSED IN THE
ADDRESS WINDOW OF THE ENVELOPE CONTAINING THIS MATERIAL
13500 SOUTH PERRY AVENUE, RIVERDALE, ILLINOIS 60627-1182 PHONE 708 849-2500
<PAGE>
ACME METALS INCORPORATED
13500 S. PERRY AVENUE, RIVERDALE, ILLINOIS 60627-1182
---------------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
the Board of Directors of Acme Metals Incorporated of the accompanying proxy to
be used at the Annual Meeting of Shareholders of Acme Metals Incorporated and
any adjournment thereof. In this proxy statement "Company" means Acme Metals
Incorporated and its predecessor company, "Board" means the Board of Directors
of the Company, "common stock" means the common stock of the Company, "Annual
Meeting" means the Annual Meeting of Shareholders.
The Annual Meeting will be held on Thursday, April 27, 1995, at the time
and place and for the purposes set forth in the accompanying Notice of Annual
Meeting. At the date of this proxy statement the only business which the Board
intends to present, or knows that others will present, is described in this
proxy statement.
The Board has fixed the close of business on March 6, 1995 as the record
date for the determination of shareholders entitled to notice and to vote at the
Annual Meeting. At the record date, there were 11,576,084 shares of common
stock, par value $1.00 per share, outstanding and entitled to vote on all
matters to be acted upon at the meeting.
The Notice of Meeting, this proxy statement, form of proxy card and Annual
Report/Form 10-K for 1994 are being mailed on or about March 31, 1995 to each
shareholder of the Company at such holder's address of record.
Unless otherwise indicated, information furnished in this proxy statement
prior to May 25, 1992 is for Acme Steel Company and after May 25, 1992 is for
Acme Metals Incorporated. The Securities and Exchange Commission has determined
that for reporting purposes Acme Metals Incorporated is successor to Acme Steel
Company.
Under Delaware law and the Company's Restated Certificate of
Incorporation, for each share of common stock held, each shareholder is entitled
to cast one vote for each nominee for each of the six directorships to be
filled. On other matters, each shareholder is entitled to cast one vote for
each share of common stock held. The six nominees for director receiving the
highest number of votes cast will be elected whether or not any of them receive
the vote of a majority of the shares represented at the meeting. Approval of
Proposal No. 2 addressing ratification of the selection of independent
accountants, described herein, will require the affirmative vote of the majority
of the shares of common stock represented at the meeting. Representation in
person or by proxy of a majority of the outstanding shares entitled to vote is
required for a quorum at the Annual Meeting. Abstentions and "non-votes" are
counted as present in determining whether the quorum requirement is satisfied.
Abstentions and "non-votes" have the same effect as votes against proposals
presented to shareholders other than election of directors. A "non-vote" occurs
when a nominee holding shares for a beneficial owner votes on one proposal, but
does not vote on another proposal because the nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner.
Shares of common stock represented by properly executed proxies, if such
proxies are received at or prior to the Annual Meeting, and not revoked, will be
voted at such meeting in accordance with any specifications thereon or, if no
specifications are made, will be voted FOR the election of the Board's
<PAGE>
nominees and FOR ratification of the selection of Price Waterhouse as
independent accountants. Any proxy may be revoked at any time before it is
exercised by receipt of a later dated proxy, or by receipt by the Secretary of
the Company of a written revocation, or by voting by ballot at the meeting.
The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally or by
telephone and by certain executive officers or regular employees of the Company,
none of whom will receive any compensation therefor in addition to their regular
remuneration. The Company will reimburse brokers and certain other persons
holding stock in their names or in the names of nominees for their expenses in
sending proxy material to principals and obtaining their proxies.
The Company has retained Morrow & Co., Inc., 909 Third Avenue, New York,
New York, to aid in the solicitation of proxies from brokers, bank nominees and
other institutional owners, but not individual holders of record, by personal
interview, telephone, telegram or mail. The Company will pay Morrow & Co., Inc.
fees not to exceed $5,500.00 and will reimburse such organization for certain
expenses incurred by it.
In order to be considered for inclusion in the Company's proxy statement
and form of proxy for the 1996 Annual Meeting of Shareholders, any shareholder
proposal intended to be presented at that meeting must be received by the
Company at the address shown on the first page of this proxy statement on or
before November 20, 1995.
The Company's 1994 Annual Report/Form 10-K is being mailed to shareholders
on or before the date of mailing of this proxy statement. The Annual
Report/Form 10-K contains financial and other information about the Company, but
the Annual Report/Form 10-K is not incorporated in this proxy statement and is
not to be deemed a part of the proxy soliciting material.
SHAREHOLDERS WITH QUESTIONS CONCERNING ACME METALS AND ITS OPERATIONS OR
REQUESTING A COPY OF THE COMPANY'S FORM 10-K SHOULD DIRECT INQUIRIES TO CHARLES
A. NEKVASIL, DIRECTOR, PUBLIC AND INVESTOR RELATIONS, ACME METALS INCORPORATED,
PHONE 708-841-8383, EXT. 2266.
The Notice of Meeting, this proxy statement and a voting instruction card
are being mailed to eligible participants in the Company's Salaried Employees
Retirement Savings Plan, the Company's Employee Stock Ownership Plan and the
Alpha Tube Corporation Employees 401(k) Retirement Plan. Harris Trust and
Savings Bank, Trustee for the plans, as the shareholder of record of the shares
of common stock held in the plans, will vote the shares in accordance with
written instructions from the participants and where no instructions are
received, the Trustee will vote in accordance with the recommendations set forth
by the Board in this proxy statement.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
The Restated Certificate of Incorporation of the Company provides that the
Board shall consist of not fewer than three nor more than fifteen directors, as
may be fixed by the Board from time to time. The directors are divided into
three classes, as nearly equal in number as possible, designated Class I, Class
II and Class III. At each Annual Meeting successors to the class of directors
whose term expires at that annual meeting are elected for a three-year term.
The Board has fixed the number of directors at twelve. Shareholders may only
vote their shares for the number of nominees named in this proxy statement.
2
<PAGE>
There are currently twelve directors; three Class I directors whose terms
expire in 1996 (Messrs. Gauthier, McCall and Wilson); one Class I director whose
term expires in 1995 (Mr. Sutherland); three Class II directors whose terms
expire in 1997 (Messrs. Bennett, Laidlaw and LePage), and five Class III
directors whose terms expire in 1995 (Messrs. Jordan, MacDonald, Marsden, Sovey,
and Dr. O'Cleireacain).
The Board of Directors proposes that two directors be elected as Class I
directors for a one-year term expiring in 1996 and four directors be elected as
Class III directors for a three-year term expiring in 1998. Dr. O'Cleireacain
would be reclassified from a Class III director to a Class I director with a
term expiring in 1996; Mr. Sutherland's classification would continue as a Class
I director, however, his term would expire in 1996 with the other Class I
directors.
Should all directors be elected as proposed, the number and classes of
directors would be five Class I directors with terms expiring in 1996; three
Class II directors with terms expiring in 1997, and four Class III directors
with terms expiring in 1998. This will balance the number of directors within
each class as equally as possible as is required in the By-Laws.
The six persons listed below, as nominees to be elected as directors, will
serve for the terms indicated and until their respective successors shall be
elected and qualified. Each nominee has consented to being named in this proxy
statement and to serve if elected. In the event of the inability of any one or
more of the nominees to stand for election, which is not anticipated, the Board
has authorized Messrs. Stephen D. Bennett, Edward P. Weber, Jr. and Jerry F.
Williams ("Proxies"), in the exercise of their discretion, to nominate and vote
for a substitute nominee or nominees, or in lieu thereof, the Board may reduce
the number of directors in accordance with the By-Laws of the Company.
At the time of the Reorganization in 1992, the directors of Acme Steel
Company became directors of the Company. Each incumbent director's term of
office remained the same as it had been with Acme Steel Company. The term of
office indicated below includes the term of office with Acme Steel Company, if
applicable.
Information regarding the nominees and current directors is set forth
below. There are no marriage, blood or adopted relationships among the
individuals. Each current director has served continuously since he or she was
first elected.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS FOR A TERM EXPIRING IN 1996
CAROL O'CLEIREACAIN
Age 48
Director since April 1994 (Designated Union Representative)
Member: Audit Review and Nominating Committees
[Photo] Independent Consultant January 1994 to present; Director, New
York City Office of Management and Budget (municipal
government) August 1993 to December 1993; Commissioner of the
New York City Department of Finance (municipal government)
February 1990 to August 1993; Chief Economist for District
Counsel 37, American Federation of State, County and Municipal
Employees (labor union) September 1976 to February 1990.
3
<PAGE>
NOMINEES FOR ELECTION AS CLASS I DIRECTORS FOR A TERM EXPIRING IN 1996 -
CONTINUED
L. FREDERICK SUTHERLAND
Age 43
Director since January 27, 1995
[Photo] President of Uniform Services Group of ARAMARK Corporation
(diversified services management company) April 1, 1993 to
present; Senior Vice President, Finance February 1991 to April
1993 and Vice President of Corporate Finance and Development
August 1988 to February 1991 of ARAMARK Corporation. He is a
director of ARAMARK Corporation and many of its subsidiary
companies.
NOMINEES FOR ELECTION AS CLASS III DIRECTORS FOR A TERM EXPIRING IN 1998
EDWARD G. JORDAN
Age 65
Director since July 1988
Member: Audit Review, Finance (Chairman) and Nominating
Committees
[Photo] Private Investor 1989 to present; Consultant to the Board of
Trustees of The American College (private, accredited,
nontraditional college specializing in financial services and
insurance education) during 1988 and President and Chief
Executive Officer 1982 through 1987. He is a director of
ARAMARK Corporation and The Pittston Company.
REYNOLD C. MacDONALD
Age 76
Director since June 1986
Member: Audit Review, Executive, Finance and Nominating
Committees
[Photo] Retired Chairman of the Board of Acme Steel Company since May
1992. Chairman of the Board of Acme Steel Company June 1986
to May 1992. He is a director of ARAMARK Corporation and
Kaiser Resources.
BRIAN W. H. MARSDEN
Age 63
Director since June 1986
Member: Executive (Chairman) and Finance Committees
[Photo] Chairman and Chief Executive Officer since January 1, 1993;
Chairman, President and Chief Executive Officer May 1992
through December 1992; President and Chief Executive Officer
of Acme Steel Company June 1986 to May 1992.
4
<PAGE>
NOMINEES FOR ELECTION AS CLASS III DIRECTORS FOR A TERM EXPIRING IN 1998
- -CONTINUED
WILLIAM P. SOVEY
Age 61
Director since June 1991
Member: Compensation, Finance and Nominating (Chairman)
Committees
[Photo] Vice Chairman and Chief Executive Officer of Newell Co.
(manufacturing and marketing company for high volume hardware
and housewares, office and industrial products) since 1992;
President and Chief Operating Officer of Newell Co. 1986 to
1992.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF TWO (2) NOMINEES AS CLASS I
DIRECTORS OF THE COMPANY AND FOUR (4) NOMINEES AS CLASS III DIRECTORS OF THE
COMPANY WHICH IS PRESENTED AS PROPOSAL NO. 1.
CLASS I DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 1996
C. J. GAUTHIER
Age 73
Director since June 1986
Member: Audit Review, Compensation, Executive and Nominating
Committees
[Photo] Retired Chairman, President and Chief Executive Officer of
NICOR Inc. (public utility holding company) since January
1986.
JULIEN L. MCCALL
Age 73
Director since June 1986
Member: Compensation, Finance and Nominating Committees
[Photo] Retired Chairman of the Board and Chief Executive Officer of
National City Corporation (bank holding company) since May
1986. Chairman of the Board and Chief Executive Officer of
National City Corporation from December 1980 to May 1986. He
is a director of Brush Wellman Inc. and R B & W Corporation.
WILLIAM R. WILSON
Age 67
Director since July 1992
Member: Audit Review, Compensation and Nominating Committees
[Photo] Retired Chairman and Chief Executive Officer of Lukens Inc.
(manufacture and sale of plate steel and stainless steel
products) since December 1991; Chairman and Chief Executive
Officer April 1981 to December 1991. He is a director of
Columbia Gas System, Inc. and Provident Mutual Life Insurance
Company.
5
<PAGE>
CLASS II DIRECTORS CONTINUING IN OFFICE FOR A TERM EXPIRING IN 1997
STEPHEN D. BENNETT
Age 46
Director since January 1993
Member: Executive and Finance Committees
[Photo] President and Chief Operating Officer of Acme Metals
Incorporated since January 1, 1993 and Group Vice President
May 25, 1992 to December 31, 1992; Group Vice President of
Acme Steel Company (integrated steel producer) January 1992
through May 1992 and Vice President-Operations June 1990
through December 1991; General Manager of Fairfield Works, USS
Division of USX Corporation (domestic integrated steel
producer) December 1987 to May 1990.
ANDREW R. LAIDLAW
Age 48
Director since May 1987
Member: Audit Review (Chairman), Executive and Nominating
Committees
[Photo] Chairman of the Executive Committee or Partner at the firm of
Seyfarth, Shaw, Fairweather & Geraldson (law firm) since 1978.
FRANK A. LePAGE
Age 67
Director since May 1987
Member: Compensation (Chairman), Finance and Nominating
Committees
[Photo] Retired Director and Executive Vice President of The Firestone
Tire & Rubber Company (manufacturer of tires and related
products) since 1982. He is a director of Parker-Hannifin
Corporation.
BOARD AND COMMITTEE MEETINGS
The Board has an Audit Review Committee, a Compensation Committee, an
Executive Committee, a Finance Committee and a Nominating Committee. During the
fiscal year ended 1994 there were eleven Board of Director meetings, two Audit
Review Committee meetings, two Compensation Committee meetings, two Finance
Committee meetings and four Nominating Committee meetings. The Executive
Committee did not meet. In the 1994 fiscal year each director was present for
at least 75% of the combined number of meetings of the Board and Committees on
which each director served. The members of the committees are identified above.
The Audit Review Committee is charged with the duties of recommending to
the Board the appointment of independent accountants; meeting periodically with
the independent accountants and internal auditors to review the adequacy of
internal controls and financial reporting; reviewing financial statements; and
reviewing, appraising, and reporting to the Board on accounting and reporting
practices, the internal control system and the audit effort by both the
independent accountants and internal auditors.
The Compensation Committee reviews and makes recommendations to the Board
regarding all salaries and benefits relating to officers of the Company and its
subsidiaries and certain highly
6
<PAGE>
compensated employees, reviews and makes recommendations regarding the Company's
benefit plans, and administers certain benefit plans.
The Executive Committee may exercise all of the powers of the Board with
reference to the conduct of the business and affairs of the Company in the
interim between meetings of the Board.
The Finance Committee reviews and makes recommendations to the Board with
respect to allocation of resources for capital expenditures, dividend policy,
capitalization of the Company, major debt and equity financing transactions,
financial aspects of major acquisitions or dispositions of businesses or assets
by the Company and investment policies of pension funds established for the
benefit of employees of the Company and its subsidiaries.
The Nominating Committee reviews and makes recommendations to the Board
regarding criteria for membership on the Board, the number of members of the
Board, reviews nominees for membership to the Board, makes recommendations to
the Board with respect to the Company's policies on the level of compensation of
Board members and the retention and retirement of directors who are not officers
of the Company. Shareholders desiring to recommend nominees for consideration
by the Nominating Committee should submit, together with appropriate
biographical information, a statement of the nominee's qualifications and
consent to the Secretary of the Company, 13500 South Perry Avenue, Riverdale,
Illinois 60627-1182. Such information must be received by the Secretary of the
Company not less than 120 days prior to the Annual Meeting of Shareholders.
DIRECTORS COMPENSATION
Mr. MacDonald entered into an agreement with the Company effective June 1,
1992 to provide consulting services for a three-year period (through May 31,
1995). Mr. MacDonald is paid an annual fee of $50,000 in addition to any
payments to which he may be entitled as a non-employee director of the Company.
Under the terms of the contract, he is furnished with an office, secretarial and
certain other business office services which amounted to approximately $40,000
in 1994. On March 1, 1995 the Nominating Committee recommended to the Board of
Directors and the Board of Directors approved the Company entering into an
agreement to extend the term of the consulting services agreement with Mr.
MacDonald for an additional two-year period ending May 31, 1997 upon the same
terms and conditions contained in the existing agreement. The Company and Mr.
MacDonald have not executed this extension agreement but will do so prior to the
expiration of the current agreement.
Directors who are not also officers of the Company are currently paid an
annual director's fee of $18,000 and a fee of $1,000 for attending a meeting of
the Board and a fee of $1,000 for attending a meeting of a committee of the
Board, whether or not more than one meeting is held on the same day. The
Chairmen of the Audit Review, Compensation, Finance and Nominating Committees
are paid an additional annual fee of $2,000. The Company provides accidental
death and dismemberment insurance for all outside directors while on the
business of the Company. All Directors are reimbursed for expenses incurred in
connection with Board and committee meetings.
In addition to the remuneration above, the Company paid fees not material
in amount for services rendered by certain outside directors outside the scope
of normal Board and committee meetings.
In 1992 the Company adopted the Acme Metals Incorporated Non-Employee
Directors Retirement Plan (the "Directors Retirement Plan") which provides for
benefits to directors who are not employees of the Company and who retire from
the Board after attaining 65 years of age. Four years of service as a
non-employee director is required to be eligible for a minimum retirement
benefit of 40% of the annual retainer in effect at the date of retirement. The
benefit increases 10% for each additional year of service to a maximum of 100%
of the annual retainer in effect at the date of retirement. The Directors
7
<PAGE>
Retirement Plan is an unfunded non-qualified plan and all benefits will be paid
out of current earnings. No benefits are payable to the spouse or dependents of
a retired director.
Under the Company's Non-Employee Directors' Stock Compensation Plan (the
"Plan") adopted January 27, 1995, 50% of the annual retainer payable to
non-employee directors is paid in shares of the Company's common stock. The
Plan is administered by the Nominating Committee of the Board of Directors.
In accordance with the terms of and the formula in the Plan, each
non-employee director of the Company received 490 shares of common stock on
January 27, 1995. Commencing in 1996, on the 5th business day following the
release to the public of the Company's fourth quarter and year-end financial
results (the "Issue Date"), each non-employee director will receive a number of
shares equal to one-half of the annual retainer in effect at the time divided by
the fair market value of the Company's common stock on the Issue Date.
Non-employee directors are entitled to dividends, as and if declared, and
have full voting rights on the shares issued under the Plan. No shares under
the Plan may be assigned, sold, transferred, pledged or otherwise encumbered for
a period of two years after the Issue Date (including any stock dividend),
unless a non-employee director ceases to serve on the Board of Directors by
reason of death, disability or retirement, in which case the restrictions cease
immediately.
A total of 25,000 shares have been reserved under the Plan. Shares issued
under the Plan may be authorized and unissued shares or authorized and issued
shares which have been reacquired by the Company. The Plan may be terminated by
the Board of Directors at any time or the Plan will terminate when all of the
shares reserved shares have been issued.
EXECUTIVE OFFICERS OF THE COMPANY
The following is a listing of the executive officers of the Company.
Service with Acme Steel Company is considered as service with the Company. All
positions are with the Company.
<TABLE>
<CAPTION>
NAME AGE OFFICES HELD/BUSINESS EXPERIENCE DATES HELD
- ------------------- --- -------------------------------- ----------
<S> <C> <C> <C>
Brian W. H. Marsden 63 Chairman and Chief Executive Officer January 1993 to present
Chairman, President and Chief Executive May 1992 to December 1992
Officer
President and Chief Executive Officer June 1986 to May 1992
Stephen D. Bennett 46 President and Chief Operating Officer January 1993 to present
Group Vice President January 1992 to December 1992
Vice President-Operations June 1990 to December 1991
Gerald J. Shope 51 Vice President-Employee Relations April 1, 1995*
Richard J. Stefan 58 Vice President-Employee Relations June 1986 to March 31, 1995**
Edward P. Weber, Jr. 57 Vice President, General Counsel and June 1986 to present
Secretary
<FN>
* Elected effective April 1, 1995; currently Vice President-Human Resources of
Acme Steel Company since January 1, 1992
** Retirement date March 31, 1995
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NAME AGE OFFICES HELD/BUSINESS EXPERIENCE DATES HELD
- ------------------- --- ----------------------------------------- ----------------------
<S> <C> <C> <C>
Jerry F. Williams 55 Vice President-Finance and Administration July 1, 1994 to present
Vice President-Finance and
Administration and Treasurer May 1991 to July 1994
Vice President-Finance and
Administration June 1986 to May 1991
James W. Hoekwater 48 Treasurer July 1, 1994 to present
Gregory J. Pritz 37 Controller August 1, 1994 to present
</TABLE>
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN BENEFICIAL OWNERS
As of February 10, 1995, the following entities were known to the Company
to be the beneficial owners of more than 5% of common stock:
<TABLE>
<CAPTION>
NUMBER OF SHARES PER CENT
NAME AND ADDRESS OF OF COMMON STOCK OF
BENEFICIAL OWNER BENEFICIALLY OWNED (1) CLASS (2)
------------------------------- --------------------- ---------
<S> <C> <C>
Mackenzie Financial Corporation 1,425,000 (3) 11.9
Suite 805
150 Bloor Street West
Toronto, Ontario M5S 3B5
Goodman & Company Investment Counsel 805,000 (4) 6.7
Scotia Plaza
40 King Street West
Toronto, Ontario M5H 4A9
General Accident Assurance Company 650,000 (4) 5.4
Two First Canadian Place
Suite 2600
Toronto, Ontario M5X 1J1
<FN>
- -------------
(1) As used in this section, the term beneficial ownership with respect to a
security is defined by Rule 13d-3 under the Securities Exchange Act of 1934
as consisting of sole or shared voting power (including the power to vote or
direct the vote) and/or sole or shared investment power (including the power
to dispose or direct the disposition) with respect to the security through
any contract, arrangement, understanding, relationship or otherwise. Unless
otherwise indicated, beneficial ownership consists of sole voting and
investment power.
(2) The shares owned by each person or entity, or by the group, and the
shares included in the total number of shares outstanding have been adjusted
and the per cent owned has been computed in accordance with Rule 13d-3(d)(1)
under the Securities and Exchange Act.
9
<PAGE>
(3) The number of shares of common stock beneficially owned was determined by a
review of a Schedule 13G filed with the Securities and Exchange Commission
which states that Mackenzie Financial Corporation has sole voting and
dispositive power for all of the shares reported.
(4) The number of shares of common stock beneficially owned was disclosed by a
representative of the company in a telephone conversation with a
representative of the Company.
</TABLE>
OFFICERS AND DIRECTORS
The following table sets forth as of February 10, 1995 information with
respect to beneficial ownership of the Company's common stock by all directors
and nominees, each of the executive officers named in "Executive Compensation"
below, all directors and executive officers as a group, and per cent of class.
<TABLE>
<CAPTION>
PER CENT
NAME OF AMOUNT AND NATURE OF OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS(2)
<S> <C> <C>
Stephen D. Bennett 38,911 (3) *
C. J. Gauthier 663 *
Edward G. Jordan 1,490 *
Andrew R. Laidlaw 1,490 *
Frank A. LePage 2,990 *
Reynold C. MacDonald 50,490 *
Brian W. H. Marsden 156,958 (4) 1.3
Julien L. McCall 1,490 *
Carol O'Cleireacain 590 *
William P. Sovey 1,490 *
Richard J. Stefan 42,174 (5) *
L. Frederick Sutherland 490 *
Edward J. Weber, Jr. 36,981 (6) *
Jerry F. Williams 63,224 (7) *
William R. Wilson 1,490 *
All directors and executive 404,077 (3)(4)(5)(6)(7) 3.4
officers as a group, 17 persons
* Less than 1% of class
<FN>
- -------------
(1) As used in this section, the term beneficial ownership with respect to a
security is defined by Rule 13d-3 under the Securities Exchange Act of 1934
as consisting of sole or shared voting power (including the power to vote
or direct the vote) and/or sole or shared investment power (including the
power to dispose or direct the disposition) with respect to the security
through any contract, arrangement, understanding, relationship or
otherwise. Unless otherwise indicated, beneficial ownership consists of
sole voting and investment power.
(2) The shares owned by each person or entity, or by the group, and the shares
included in the total number of shares outstanding have been adjusted and
the per cent owned has been computed in accordance with Rule 13d-3(d)(1)
under the Securities and Exchange Act.
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
(3) Includes 24,400 shares which are not now owned but could be acquired by
exercise of stock options, 7,000 shares which are subject to conditions of
forfeiture and restrictions on sale, transfer or other disposition, and
2,263 shares held by the trustee of the Company's Employee Stock Ownership
Plan ("ESOP") which are attributable to Mr. Bennett's account.
(4) Includes 91,800 shares which are not now owned but could be acquired by
exercise of stock options, 3,700 shares which are subject to conditions of
forfeiture and restrictions on sale, transfer or other disposition, 2,500
shares owned by a family member to which Mr. Marsden disclaims beneficial
ownership, and 4,178 shares held by the trustee of the ESOP which are
attributable to Mr. Marsden's account.
(5) Includes 25,550 shares which are not now owned but could be acquired by
exercise of stock options, 800 shares which are subject to conditions of
forfeiture and restrictions on sale, transfer or other disposition, 2,407
shares held by the trustee of the Company's Salaried Employees Retirement
Savings Plan (SERSP) which are attributable to Mr. Stefan's account and
2,762 shares held by the trustee of the ESOP which are attributable to Mr.
Stefan's account.
(6) Includes 25,650 shares which are not now owned but could be acquired by
exercise of stock options, 4,200 shares which are subject to conditions of
forfeiture and restrictions on sale, transfer or other disposition, 100
shares held by family members, and 2,831 shares held by the trustee of the
ESOP which are attributable to Mr. Weber's account.
(7) Includes 32,250 shares which are not now owned but could be acquired by
exercise of stock options, 4,580 shares which are subject to conditions of
forfeiture and restriction on sale, transfer or other disposition, 14,534
shares held by the trustee of the SERSP which are attributable to
Mr. Williams' account, and 3,451 shares held by the trustee of the ESOP
which are attributable to Mr. Williams' account.
</TABLE>
OTHER PRINCIPAL HOLDER OF VOTING SECURITIES
On March 6, 1995, Harris Trust and Savings Bank, Trustee for the Company's
Salaried Employees Retirement Savings Plan, the Company's Employee Stock
Ownership Plan, and the Alpha Tube Corporation Employees 401(k) Retirement Plan,
held 956,056 shares, or 8.2%, of common stock then outstanding. Shares held by
the Trustee on account of each of the participating employees will be voted by
the Trustee in accordance with written instructions from the participants and
where no instructions are received, the Trustee will vote in accordance with the
recommendations set forth by the Board in this proxy statement. In addition, on
March 6, 1995 Harris Trust and Savings Bank, as Trustee under the Company's
Pension and Retirement Plans Trust ("Trust"), held 110,428 shares, or .9%, of
common stock then outstanding. Under the terms of the Trust, absent direction
from the Company, the Trustee is authorized to exercise voting rights as it
deems proper.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission ("SEC"). Officers, directors and greater than ten percent
shareowners are required by SEC regulation to furnish the Company with copies of
all Forms 3, 4 and 5 filed.
Based solely on the Company's review of the copies of such forms it has
received and written representations from certain reporting persons that they
were not required to file Form 5 for specified fiscal years, the Company
believes that all its officers, directors, and greater than ten percent
beneficial owners complied with all filing requirements applicable to them with
respect to transactions during fiscal 1994 except that Mr. Hoekwater was late in
filing the Form 3 report and Mr. Williams was late in filing a Form 4 report.
11
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
of the Company's Chief Executive Officer and each of the four other most highly
compensated executive officers for services in all capacities in the fiscal
years 1992, 1993 and 1994.
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------------
Annual Compensation Awards
----------------------------------------- -------------------------------------------------
Other Securi- All
Name Annual Restricted ties Un- Other
and Compen- Stock derlying Compen-
Principal Salary Bonus sation Award(s) Options sation
Position Year ($) ($) ($) ($) (#) ($)(3)
- -------------------- ---- ------- ------- ------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Brian W. H. 1994 400,000 240,000 (1) - 0 - 15,000 64,300
Marsden 1993 380,000 228,000 34,500 15,000 44,650
Chairman and Chief 1992 360,000 - 0 - - 0 - 10,000 68,264
Executive
Stephen D. Bennett 1994 250,000 112,500 37,650(1) 34,875 10,000 35,861
President and Chief 1993 210,000 94,500 32,812 25,875 10,000 24,675
Operating Officer 1992 160,000 - 0 - 107,250 7,000 25,900
Richard J. Stefan 1994 141,000 63,500 (1) - 0 - 4,000 21,680
Vice President- 1993 135,000 60,800 17,250 4,000 15,862
Employee Relations 1992 129,000 7,375 4,000 20,636
Edward P. Weber, Jr. 1994 142,000 63,900 (1) 23,250 4,000 21,820
Vice President, 1993 136,000 61,200 17,250 4,000 15,980
General Counsel 1992 130,000 - 0 - 18,972 11,062 4,000 20,776
and Secretary
Jerry F. Williams 1994 178,000 80,100 (1) 27,900 5,000 26,951
Vice President- 1993 170,000 76,500 20,700 5,000 19,975
Finance and 1992 160,000 - 0 - 16,448 14,750 5,000 25,564
Administration
<FN>
(1) The dollar value of perquisites and other personal benefits for executive
officers other than Mr. Bennett was less than the established reporting
thresholds. The amount reported for Mr. Bennett includes $25,219 for
country club fees and dues which is in excess of 25% of the total
perquisites and other personal benefits reported for Mr. Bennett and
$12,431 for automobile expenses.
(2) Values of restricted stock awards in the Summary Compensation Table are
based on the closing price on the date of grant. The total number and
value of the aggregate restricted shares at December 25, 1994 based on the
closing price on that date, were as follows: Mr. Marsden, 3,700 shares,
value $66,831; Mr. Bennett, 4,900 shares, value $88,506; Mr. Stefan, 1,300
shares, value $23,481; Mr. Weber, 2,200 shares, value $39,738; Mr.
Williams, 2,710 shares, value $48,949. Dividends are payable on restricted
shares.
The vesting schedule for stock awards granted on January 29, 1994 is 20% of
the shares granted on July 30, 1994, 1995, 1996, 1997 and 1998. The total
number of shares granted and the number of shares of each
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
(2) continued
installment follows: Mr. Marsden, none; Mr. Bennett, 1,500 shares granted
in installments of 300 shares each, Mr. Stefan, none; Mr. Weber, 1,000
shares granted in installments of 200 shares each; Mr. Williams, 1,200
shares in installments of 240 shares each.
The vesting schedule for stock awards granted on January 26, 1993 is 20% of
the shares granted on July 27, 1993, 1994, 1995, 1996 and 1997. The total
number of shares granted and the number of shares of each installment
follows: Mr. Marsden, 2,000 shares granted in installments of 400 shares
each; Mr. Bennett, 1,500 shares granted in installments of 300 shares each;
Mr. Stefan, 1,000 shares granted in installments of 200 shares each; Mr.
Weber, 1,000 shares granted in installments of 200 shares each; Mr.
Williams, 1,200 shares granted in installments of 240 shares each.
The vesting schedule for stock awards granted on January 22, 1992 is 20% of
the shares granted on July 23 of 1992, 1993, 1994, 1995 and 1996. The
total number of shares granted and the number of shares of each installment
follows: Mr. Marsden, none; Mr. Bennett, 1,000 shares granted in
installments of 200 shares each; Mr. Stefan, 500 shares granted in
installments of 100 shares each; Mr. Weber, 750 shares granted in
installments of 150 shares each; Mr. Williams, 1,000 shares granted in
installments of 200 shares each.
The vesting schedule for the stock award granted to Mr. Bennett on June 12,
1992 is 1,000 shares on December 13, 1992 through 1996 for a total grant of
5,000 shares.
(3) Amounts in this column are Company contributions to the SERSP and ESOP,
which are defined contribution plans.
</TABLE>
[This Space Intentionally Left Blank]
13
<PAGE>
STOCK OPTION GRANTS IN 1994
The following table sets forth certain information relating to options to
purchase common stock granted in the fiscal year 1994 to the five individuals
named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR (1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATE OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS IN 1994 OPTION TERM(5)
---------------------------------------------------------------------- -----------------------------
NUMBER OF
SECURITIES PER CENT OF
UNDERLYING TOTAL OPTIONS EXERCISE OR
OPTION GRANTED TO BASE PRICE
GRANTED (2) EMPLOYEE IN PER SHARE(4) EXPIRATION
NAME (#) FISCAL YEAR(3) ($SH) DATE 5% ($) 10% ($)
- -------------------- ----------- -------------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
All Shareholders (6) 83,434,150 211,439,345
B. W. H. Marsden 15,000 17.96% 23.875 5/26/04 225,223 570,759
S. D. Bennett 10,000 11.97% 23.875 5/26/04 150,149 380,506
R. J. Stefan 4,000 4.79% 23.875 5/26/04 60,059 152,202
E. P. Weber 4,000 4.79% 23.875 5/26/04 60,059 152,202
J. F. Williams 5,000 5.98% 23.875 5/26/04 75,074 190,253
Named Executive Officers' Gains as a % of All .684% .684%
Shareholders' Gains(7)
<FN>
(1) Stock Appreciation Rights were not granted during 1994.
(2) All options were granted on May 26, 1994. One-half of the options become
exercisable on May 26, 1995 and one-half become exercisable on May 26, 1996
unless the vesting schedule is accelerated to become fully exercisable upon
death, retirement, disability or a change in control as defined in the
Grant of Stock Option agreement. The options were granted for a term of 10
years, subject to earlier termination in certain events related to
termination of employment.
(3) Based on 83,500 options granted to all employees.
(4) Exercise price is the market value per share on the date of grant,
determined by calculating the average of the high and low prices of the
common stock on the NASDAQ Over-the-Counter Markets, National Market
Issues, as reported in THE WALL STREET JOURNAL for the date of grant.
(5) Total dollar gains based on the assumed annual rates of appreciation shown
here and calculated on 5,556,792 outstanding shares - the number of shares
outstanding on the date of grant. The dollar amounts in these columns are
the result of calculations at the 5% and 10% rates set by the Securities
and Exchange Commission ("SEC") and are NOT intended to forecast future
appreciation of the common stock. As an alternative to the assumed
potential realizable values stated in the 5% and 10% Columns, SEC rules
would permit stating the present value of such options at the date of
grant. Methods of computing present value suggested by different
authorities can produce significantly different results. Moreover, since
stock options granted by the Company are not transferrable, there is no
objective criteria by which any computation of present value can be
verified. Consequently, the Company does not believe there is a reliable
method of computing the present value of such stock options.
(6) All Shareholders is shown for comparison purposes only. The potential
realizable value illustrates the gains all shareholders could realize
assuming a hypothetical ten-year option granted at $23.875 per share on
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
May 26, 1994 if the share price of the common stock increases at the
assumed annual rates shown in the table. There can be NO assurance that
the common stock will perform at the assumed annual rates shown in the
table. The Company will neither make nor endorse any predictions as to
future stock performance.
(7) This analysis illustrates the proportion of named executive officers' gains
as a per cent of all shareholders' gains under the above assumptions.
</TABLE>
AGGREGATED OPTION EXERCISES IN 1994 AND FISCAL YEAR END OPTION VALUES
The following table sets forth certain information concerning the exercise
of options in 1994 to purchase common stock by the five individuals named in the
Summary Compensation Table and the unexercised options to purchase common stock
held by such individuals at December 25, 1994.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
FISCAL YEAR END OPTION VALUE(1)
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT 12/25/94 12/25/94(2)
ACQUIRED ON VALUE -------------------------- ----------------------------
EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
- ------------------------- ------------ --------- ------------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Brian W. H. Marsden - 0 - N/A 91,800 22,500 307,525 29,062
Stephen D. Bennett - 0 - N/A 24,400 15,000 59,362 19,375
Richard J. Stefan - 0 - N/A 25,550 6,000 76,518 7,750
Edward P. Weber, Jr. - 0 - N/A 25,650 6,000 76,518 7,750
Jerry F. Williams - 0 - N/A 32,250 7,500 95,943 9,687
<FN>
(1) No SAR's have been granted by the Company.
(2) Calculated on the basis of the fair market value of the underlying
securities at fiscal year end, $18.375, minus the exercise price.
Options granted in 1989, 1992 and 1994 were not in-the-money at fiscal year
end.
</TABLE>
DEFINED BENEFIT PLAN
<TABLE>
<CAPTION>
AVERAGE ANNUAL
EARNINGS FOR THE 5
HIGHEST 12-MONTH
PERIODS DURING THE
LAST 10 CONSECUTIVE ESTIMATED ANNUAL PENSION PAYABLE
12-MONTH PERIODS BASED ON YEARS OF SERVICE INDICATED
------------------- ----------------------------------------------------
15 YEARS 20 YEARS 25 YEARS
-------- -------- --------
<S> <C> <C> <C>
$100,000 14,231 22,106 29,981
$150,000 26,044 37,856 49,669
$200,000 37,856 53,606 69,356
$250,000 49,669 69,356 89,044
$300,000 61,481 85,106 108,731
$400,000 85,106 116,606 148,106
$500,000 108,731 148,106 187,481
$600,000 132,356 179,606 226,856
$700,000 155,981 211,106 266,231
$800,000 179,606 242,606 305,606
$900,000 203,231 274,106 344,981
</TABLE>
15
<PAGE>
Since May 29, 1986 Acme Steel Company has maintained the "Consolidated
Pension Plan for Acme Steel Company Salaried Employees and Riverdale Plant
Hourly Employees" (the "Consolidated Plan"). Effective July 31, 1994, the Acme
Metals Incorporated Salaried Employees' Past Service Pension Plan, the plan
which provided benefits to certain employees of the Company, including certain
executive officers, was merged into the Consolidated Plan, which became the
"Consolidated Pension Plan for Acme Salaried and Hourly Employees." Effective
January 1, 1994, the Company adopted the Acme Metals Incorporated Supplemental
Benefits Plan (the "Supplemental Benefits Plan") to pay benefits to employees of
the Company, which would be payable under the Consolidated Plan, except for the
limits imposed under the Internal Revenue Code of 1986 (the "Code"). The
Supplemental Benefits Plan is a non-qualified plan for purposes of ERISA and is
unfunded.
The Consolidated Plan provides benefits based on years of credited service
with the Company (including prior service with Acme Steel Company) through
December 31, 1981 and average annual earnings for the 5 highest 12-month
periods during the 10 consecutive 12-month periods preceding retirement. The
Company and Mr. Marsden are parties to the Deferred Compensation Agreement which
entitles Mr. Marsden to a supplemental pension benefit equivalent to ten years
of additional credited service under the Consolidated Plan unless (i) his
employment with the Company is terminated for "Cause" (as defined in the
Deferred Compensation Agreement) or (ii) he engages in "competitive activity"
(as defined in the Deferred Compensation Agreement) for the period and under the
circumstances provided in that agreement. Corporate funds, rather than pension
trust assets, will be used for payment of these supplemental benefits to Mr.
Marsden and any pension benefits payable in excess of the maximum amount
permitted under the Code. Mr. Marsden was deemed to have approximately 15 years
of credited service as of December 31, 1981. Mr. Williams has approximately 17
years of credited service and Mr. Stefan has approximately 22 years of credited
service. Any pension benefits to Mr. Williams and Mr. Stefan in excess of the
maximum amounts permitted under the Code will be provided under the Supplemental
Benefits Plan unless either experiences a "Discharge for Cause" (as defined in
the Supplemental Benefits Plan). Messrs. Bennett and Weber joined the Company
after December 31, 1981 and therefore do not participate in the Consolidated
Plan.
The preceding table is based upon retirement at age 65, a pension payable
for the life of the retiree only, and a social security offset of $8,947.00 per
year. Different benefits under the Consolidated Plan may be payable for persons
whose employment terminates prior to age 65. For purposes of the table,
average annual earnings include salaries and bonuses paid or deferred during the
twelve-month period.
The Consolidated Plan provides a transition pension for salaried employees,
including certain executive officers, who were employed on December 31, 1981, if
the benefit attributable to certain contributions by the Company after December
31, 1981 under the Company's Salaried Employees' Retirement Savings Plan (the
"SERSP ") is less than the benefit under the Consolidated Plan, which would be
attributable to continuous service between January 1, 1982 and the earlier of
December 31, 1991 and termination of employment. The amount attributable to
such Company contributions from 1982 through 1988 is all Company contributions
in excess of 6 1/2 percent of the participant's earnings and from 1989 through
1991 is all Company contributions, for each calendar quarter of continuous
service, together with amounts which would have been earned had such
contributions been invested and reinvested in the Diversified Investment Fund in
the SERSP. In the case of executive officers, earnings are the same for
purposes of the SERSP as for purposes of the Consolidated Plan. Future
performance of the Diversified Investment Fund, annuity interest rates, and the
earnings of participants during the 10 years preceding retirement will determine
whether or not any transition pension will be payable. Unless a participant
becomes entitled to a transition pension, years of credited service after
December 31, 1981 will have no effect on any estimated annual pension payable
pursuant to the Consolidated Plan.
16
<PAGE>
CHANGE IN CONTROL ARRANGEMENTS
On May 25, 1992, the Board adopted the Key Executive Severance Pay Plan
(the "Plan") from Acme Steel Company and designated the executive officers of
the Company and certain other individuals as participants. A participant may be
entitled to severance benefits under this Plan if there is a termination of his
employment without cause at any time within three years after a Change in
Control of the Company (as defined in the Plan). In addition, following a
Change in Control a participant may elect to terminate his employment without
loss of severance benefits in certain specified contingencies, including
termination of the participant's position as an officer or director; a good
faith determination by the participant that as a result of the Change in
Control, he is unable to carry out the authorities, powers, functions or duties
attached to his position; a significant adverse change in his position, duties
or compensation; the failure of a successor to assume the Company's obligations
under the Plan; excessive travel requirements or the substantial relocation of
his place of work; or, the reorganization, dissolution, liquidation,
consolidation or merger of the Company or the sale of a significant portion of
its assets.
Under the Plan, a Change in Control is deemed to have occurred if (i) the
Company is merged or reorganized into or with, or sells all or substantially all
of its assets to, another company in a transaction in which former shareholders
of the Company own less than 75 per cent of the outstanding securities of the
surviving or acquiring company after the transaction, (ii) a filing is made with
the Securities and Exchange Commission disclosing the beneficial ownership by
any person or group of 25 per cent or more of the voting power of the Company,
(iii) during any period of two consecutive years individuals who were directors
at the beginning of such period cease to constitute a majority of the Board
without the approval of two-thirds of the remaining Board members, (iv) the
shareholders of the Company approve a plan or proposal for the liquidation or
dissolution of the Company, or (v) any other event, or events, which the Board
shall determine to be a Change in Control.
A participant who is terminated with rights to severance compensation under
this Plan will be entitled to receive in respect of the "Severance Period" (as
defined in the Plan), in lieu of further salary payments to the participant, the
following: (i) a sum equal to (a) three times the participant's highest annual
aggregate base salary in effect at any time within five years prior to the date
the "Notice of Termination of Employment" (as defined in the Plan) is given,
plus (b) an amount equal to the average compensation paid in the two calendar
years prior to the date said Notice is given to the participant under the EIC
Plan, or any successor plan (provided, however, the participant may elect to
receive said sums in thirty-six (36) equal monthly payments, including interest,
after the date of said Notice); (ii) for a period of thirty-six (36) months
following the date of "Termination of Employment" (as defined in the Plan), or
until a participant's death, if earlier, life, health and accident insurance
benefits and other executive benefits the participant was receiving immediately
prior to the date of Termination of Employment; (iii) all benefits to which the
participant is entitled as a participant under the Salaried Employees' Past
Service Pension Plan, the Salaried Employees Retirement Savings Plan or other
plan or agreement relating to retirement benefits; and, (iv) all legal fees and
expenses incurred by a participant, if any, as a result of such Termination of
Employment or enforcing any right or benefit under the Plan. A letter of credit
has been obtained by the Company for the purpose of securing the payment of such
legal fees and expenses.
The net amount payable to any participant under the Plan, taking into
account payments under Other Plans, (as defined in the Plan) as appropriate, may
not exceed 2.99 times the participant's "base amount" (as defined in Section
280G of the Code), which, generally, is the average of the participant's taxable
annual income received from the Company during the five-year period preceding
the Change in Control, to avoid the special tax rules applicable to "excess
parachute payments" under federal income tax legislation enacted in 1984.
17
<PAGE>
To protect both the Company and any participant, if the severance
compensation under the Plan, either alone or together with other payments to a
participant, would constitute "excess parachute payments", as defined in Section
280G of the Code, such severance compensation payment would be reduced to the
largest amount as would result in no portion of such payments being disallowed
as deductions to the Company under Section 280G of the Code and no portion of
such payments subjecting a participant to the excise tax imposed by Section 4999
of the Code. The determination of such reductions will be made, in good faith,
by the Company's independent accountants and will be conclusively binding upon
the Company and such participant.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee of the Board of
Directors to provide the shareholders with an understanding of the Company's
executive compensation program.
THE COMMITTEE
The Committee is composed of five independent non-employee members of the
Board. It is the Committee's responsibility to develop and review the total
compensation paid to all executive officers of the Company and its subsidiaries.
Annually, it receives recommendations from management and reviews those
recommendations with professional outside compensation consultants prior to
recommending compensation programs and levels to the full Board. The Committee
held 2 meetings in 1994. No Committee members have interlocking relationships
as defined by the Securities and Exchange Commission.
COMPENSATION POLICIES AND OBJECTIVES
The Company's compensation philosophy is to reward its key executives in
line with median levels for similar positions in comparable metals or
manufacturing industries, with individual base salaries reflecting their scope
of responsibilities, impact on Company performance, experience, and proficiency
in their position. As such, the Committee's principal objective in developing
compensation opportunities is to support this philosophy and the Company's
objective of increasing shareholder returns. To achieve these goals, the
Committee believes it necessary:
* To attract, develop, retain and reward those executives who complement
the Company's shareholder interest objective in accordance with the
Company's compensation philosophy.
* To provide short-term incentive bonus opportunities based on corporate
performance measures evaluated from the annual business plan
proactively approved by the Board, the Committee recommends to the
Board which performance criteria (e.g., ROE, ROI, cash flow, operating
or sales performance measures, safety or quality performances, etc.),
which may change from year to year, shall be used to assess
performance and threshold, target and maximum bonus levels are
assigned.
* To provide long-term incentive opportunities in the form of options
and awards of shares of common stock via a plan which was approved by
the shareholders in 1986 and which is designed to align the interests
of the executives with those of the shareholders.
18
<PAGE>
COMPENSATION PROGRAM COMPONENTS
The particular elements of the compensation program for executive officers
are outlined below.
BASE SALARY -- Base salary opportunities are principally established at the
median level of salaries in a peer group of public corporations wherein the
Company competes for talent. Annual salary adjustments are recommended by the
Committee to the Board based on the individual's performance against annual
objectives, the individual's position within the assigned salary range, the
Company's financial results, and peer group increase projections.
ANNUAL INCENTIVE COMPENSATION -- Prior to the beginning of each year, the
Committee adopts, subject to ratification by the Board, the Executive Incentive
Compensation Plan ("EIC") objectives for that year, designates the participants
to one of five groups having varying ranges of incentive compensation
opportunities, and determines how incentive payments will be calculated. The
maximum incentive compensation opportunity for any individual is sixty percent
of his base salary for the year in question. In 1994, the corporate performance
criteria was Return on Equity. The maximum Return on Equity level was achieved
and each executive officer earned the maximum EIC payment for the group to which
the executive was assigned. Payments in future years will be dependent upon the
Company achieving, or exceeding, the performance criteria established in those
years. The Committee, subject to ratification by the Board of Directors,
reserves the right to amend, suspend or terminate, in whole or in part, any or
all provisions of the Plan, provided the same does not result in an increase in
the awards made to the Chief Executive Officer or other executive officers.
LONG-TERM INCENTIVE COMPENSATION -- The Company's 1986 Stock Incentive Program
(the "Program") is designed to furnish long-term incentives to executive
officers and other key corporate employees to improve corporate profits and
shareholder value by providing such persons opportunities to acquire shares of
common stock pursuant to the grant of stock awards, stock options, stock
appreciation rights and/or to receive monetary payments upon terms and
conditions adopted by the Committee and ratified by the Board. Stock awards are
generally granted with an earnout period of 5 years in installments of twenty
per cent per year in amounts determined by the Committee. The Committee
believes this approach to long-term opportunities fosters shareholder value over
the long term, since the realization of increased benefit to the executive is
based solely on stock price appreciation. Stock options are granted for a term
of 10 years, currently vest over a two-year period (one-half each year), and are
granted with an exercise price equal to the market price on the date of grant as
defined in the Program. Stock appreciation rights may be granted in connection
with grants of stock options ("Companion Option"). Generally stock appreciation
rights relate to the same number of shares of common stock covered by the
Companion Option and are subject to the same conditions relating to the
Companion Option, except for such additional limitations as may be required by
the Program or by the Board. The Committee recommends to the Board those
individuals who will participate annually and the Committee may amend or
discontinue the Program at any time, subject to ratification by the Board.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chairman and Chief Executive Officer's compensation is also reviewed
annually and is compared to other chief executive officers of public
corporations, similar in size and character to the Company, by an independent,
professional consulting firm. In determining the Chief Executive Officer's
salary adjustment in 1994, the Committee took into account the Company's
financial performance as compared to other similarly situated companies, his
individual contributions and increased responsibilities. The Committee is also
influenced by the CEO's experience within the steel industry, his representation
of the Company within the industry, and his stature within industry
organizations. The Committee believes that it is important to compensate the
CEO at an appropriate level within the salary range of his
19
<PAGE>
peers in similar businesses of equivalent size and complexity. The Chief
Executive's annual base salary was increased to $400,000 in 1994, from $380,000
in 1993.
In 1994 the Chief Executive Officer was granted options to purchase 15,000
shares of common stock at $23.875 per share and in 1993 was granted options to
purchase 15,000 shares of common stock at $14.50 per share.
LIMITATIONS ON DEDUCTIBILITY OF EXECUTIVE COMPENSATION
In 1993, the Internal Revenue Code was amended (I.R.C. Section 162(m)) to
impose a new limitation, beginning in 1994, on a corporation's ability to
deduct compensation in excess of $1,000,000 paid to the Chief Executive Officer
and the four other most highly compensated executive officers of the Company
("Covered Executives"). Generally, amounts paid to Covered Executives in
excess of the $1,000,000 limitation are not deductible by the Company, unless
such compensation qualifies under I.R.C. Section 162(m) and the regulations
proposed thereunder, as performance-based compensation.
The Committee has amended the Company's executive compensation plans in a
manner which it believes will qualify certain components of its executive
compensation program (1994 Executive Incentive Compensation Plan and 1994 Stock
Incentive Program) as performance-based compensation.
SUMMARY
The Committee believes that the total executive compensation program of the
Company is competitive with compensation programs provided by other corporations
with which the Company competes. Further, the annual EIC Plan and long-term
Program are directly linked to both the annual financial and operational results
of the Company as well as the toward the long-term growth of shareholders' value
of the Company's shareholders.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS: FRANK
A. LEPAGE, CHAIRMAN, C. J. GAUTHIER, JULIEN L. MCCALL, WILLIAM P. SOVEY, WILLIAM
R. WILSON.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1994 the Compensation Committee of the Board was comprised of
the following non-employee directors: C. J. Gauthier, Julien L. McCall, Frank A.
LePage (Chairman), William P. Sovey, William R. Wilson.
Mr. LePage is a director of Parker-Hannifin Corporation to which a
subsidiary of the Company sold tubing in the amount of $2,882,149; and Mr.
Wilson is a director of Columbia Gas System, Inc. from which the Company made
purchases of $63,021 for natural gas.
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In the fiscal year 1994, the Company and its subsidiaries made sales to and
purchases from corporations (including subsidiaries), certain executive officers
and directors of which are also directors of the Company, as follows: Messrs.
Jordan, MacDonald and Sutherland are directors of ARAMARK Corporation from which
the Company made purchases of $169,440 for food services; Mr. Laidlaw is a
partner in the law firm of Seyfarth, Shaw, Fairweather and Geraldson to which
the Company paid $98,855 for professional services on behalf of the Company; Mr.
LePage is a director of Parker-Hannifin Corporation to which the Company made
sales of $2,882,149 for tubing; Mr. Wilson is a director of Columbia Gas System,
Inc. from which the Company made purchases of $63,021 for natural gas. There
20
<PAGE>
were also purchases from one other company which did not exceed $60,000. All
transactions were in the ordinary course of business, at competitive prices and
terms and at arm's length. In the opinion of management, the amounts involved
have, in no case, been material in relation to the business of the Company or,
to the knowledge and belief of management of the Company, to the business of the
other organizations or to the individuals concerned.
PERFORMANCE GRAPH
The performance graph below provides an indicator of the cumulative total
shareholder returns for the Company for a five-year period as compared with the
cumulative total return of the Russell 2000 Index of companies and a group of
peer companies.
Comparison of Five-Year Cumulative Total Return*
Acme Metals Incorporated, Russell 2000** and
Value Line Peer Group***
FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
Russell Peer
Date ACME 2000 Group
- ---------------------------------------------------------------
<S> <C> <C> <C>
December 1989 $100.00 $100.00 $100.00
December 1990 $ 75.00 $ 80.50 $ 72.71
December 1991 $ 74.31 $117.57 $ 75.37
December 1992 $ 73.70 $139.23 $ 71.12
December 1993 $100.11 $165.53 $141.11
December 1994 $100.46 $162.51 $126.48
- ---------------------------------------------------------------
</TABLE>
PEER GROUP COMPANIES
Bethlehem Steel Corp.
Dofasco, Inc.
Inland Steel Industries, Inc.
LTV Corp.
Stelco Industries, Inc.
USX-U.S. Steel Group
WHX Corp.
* Assumes $100 invested on December 31, 1989 in common stock, Russell 2000,
and Value Line Peer Group of companies and assumes the reinvestment of
dividends on a quarterly basis.
** The Russell 2000 Index consists of 2,000 companies with a range of
capitalization comparable to the Company.
*** The Value Line Peer Group consists of the companies in the Value Line
Investment Survey - Steel Group (integrated), and includes Bethlehem Steel
Corp., Dofasco, Inc., Inland Steel Industries, Inc., LTV Corp., Stelco
Industries Inc., USX-U.S. Steel Group and WHX Corp. These companies are
engaged in substantially the same industry as and are subject to the same
market influences as the Company. Armco, Inc. is no longer included in the
Value Line Investment Survey-Steel Group (integrated) ("Steel Group") and
does not appear in this year's Performance Graph. Value Line has added LTV
Corp. and USX-U.S. Steel Group to the Steel Group and they are included in
this year's Performance Graph. Name changes for Bethlehem Steel Company to
Bethelem Steel Corp., Stelco, Inc. to Stelco Industries Inc. and Wheeling-
Pittsburgh Corporation to WHX Corp. do not reflect a change in the
companies included in the Steel Group from 1994.
21
<PAGE>
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board, acting upon the recommendation of its Audit Review Committee, on
October 27, 1994, appointed Price Waterhouse LLP as independent accountants for
the Company for the fiscal year ending December 31, 1995.
The appointment of Price Waterhouse LLP as independent accountants for the
Company for the fiscal year 1995 is conditioned upon the ratification of such
appointment at the Annual Meeting. In the event such appointment is not so
approved, the Board will reconsider its selection of independent accountants. A
representative of Price Waterhouse LLP will be present at the meeting and
available to respond to questions and will have an opportunity to make a
statement if he so desires.
The Board recommends a vote FOR the ratification of the appointment of Price
Waterhouse LLP as independent accountants which is presented as Proposal No. 2.
The solicitation of proxies in the form which accompanies this proxy
statement is made on behalf of the Board of the Company. Proxies in such form
will confer discretionary authority with respect to any other matters which may
properly be brought before the meeting.
The Annual Meeting of Shareholders will be held for the transaction of
business described above and for the transaction of such other business as may
properly come before the meeting. At the date of this proxy statement, the only
business which management intends to present, or knows that others will present,
is that described in this proxy statement. If other matters properly come
before the meeting, the Proxies, in their discretion, are authorized to vote
upon such other business as may properly come before the meeting.
By order of the Board.
/s/ Edward P. Weber, Jr.
Edward P. Weber, Jr.
Secretary
Dated: March 31, 1995
22
<PAGE>
ADMISSION
If you plan to attend the meeting and are a shareholder of record, please check
your proxy card in the space provided for that purpose. We will not be issuing
admission cards, but checking the box will pre-register you for the meeting. If
you plan to attend the meeting and your shares are held in the name of a broker
or other nominee, please bring a proxy or letter from them to the meeting to
confirm your ownership of shares.
LOCATION
Harris Trust and Savings Bank is located at 111 West Monroe, Chicago, Illinois
between Clark and LaSalle. The telephone number of the main bank is 312-461-
2121.
* Enter the bank at the 115 South LaSalle entrance.
* Take the escalators to the 3rd floor.
* Take an elevator (located to the right of the escalator) to the 8th
floor Auditorium.
Public parking is available at a garage at Wells and Monroe Street, one block
west of the bank.
<PAGE>
P ACME METALS INCORPORATED
R 13500 S. Perry Avenue
O Riverdale, Illinois 60627-1182
X
Y THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned acknowledges receipt of the accompanying Notice of Meeting and
1995 Proxy Statement and hereby appoints Stephen D. Bennett, Edward P. Weber,
Jr. and Jerry F. Williams, and each of them, Proxies, with power of
substitution, to vote on behalf of the undersigned at the Annual Meeting of
Shareholders of Acme Metals Incorporated to be held at the Harris Trust and
Savings Bank, 111 West Monroe Street, Chicago, Illinois 60690 on Thursday, April
27, 1995, at 10:00 a.m., central time, and at any adjournment or postponements
thereof with the same force and effect as the undersigned might or could do if
personally present thereat.
Election of Directors (see reverse side)
Nominees:
Class I Directors Class III Directors
- ----------------- -------------------
Carol O'Cleireacain Edward G. Jordan
L. Frederick Sutherland Reynold C. MacDonald
Brian W. H. Marsden
William P. Sovey
Comments: (such as change of address)
_________________________________________
_________________________________________
_________________________________________
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTOR'S RECOMMENDATIONS (SEE ACCOMPANYING PROXY STATEMENT).
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
<PAGE>
/X/ Please mark your 4908
votes as in this
example.
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR the Election of
Directors and FOR Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF DIRECTORS AND
FOR PROPOSAL 2.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approval of / / / / / /
Directors independent
(see reverse) accountants
For, except vote withheld from
the following nominee(s):
_______________________________
3. In the discretion of the Proxies
named herein, upon such other
matters as may properly come
before the meeting.
/ / Change of / / I plan to attend
address/ the Annual
comments Meeting of
on reverse Shareholders
Note: Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing
as attorney, executor,
administrator, trustee or
guardian, please give full
title as such.
The signer hereby revokes all
proxies heretofore given by the
signer to vote at said meeting or
any adjournments thereof.
___________________________________
___________________________________
SIGNATURE(S) DATE
